October 13, 2014
Millennials are not keen on driving; instead, they are likely to explore alternatives like biking, public transportation, and car sharing. According to a consumer report, the reasons why there has been a decrease of drivers from previous generation is the rise of gas prices, the economy, and urbanization. For some reason, the car insurance industry has not caught up with the trend.
That is what the San Francisco -based startup Metromile wants to change: why pay for expensive car insurance when you don’t use your car? Metromile offers per-mile car insurance for those who drive under 10,000 miles a year. This is an entirely new insurance model that enables low-mileage city drivers to save approximately $500/year.
With a free iOS and Android app connected to a small device you plug in you car, not only to you keep up with how much you’re spending on miles but also get important information about the state of your car. For example, the app let’s you know if there is anything wrong with your car, find where you parked your car and better routes to maximize fuel efficiency.
It’s like a fitbit for your car.
“The idea for Metromile was originally incubated inside of The Climate Corporation, founded by David Friedberg, in 2011. David was developing a data platform to help farmers reduce climate-related risks and improve their yields, and saw a similar opportunity in the automobile industry — to use technology to provide simple, transparent, fair services for drivers,” explains Dan Preston CEO of Metromile.
And these tech-savvy millennials like the idea of paying for use, since Metromile launched in Oregon in early 2013 they have expanded to Washington, Illinois, and California. Through the app, they have sent more than 18,000 street sweeping alerts to help users prevent street sweeping tickets in San Francisco and Chicago. That equates to over $1M in ticket fees saved.
Also, Metromile does not use driving behavior or skill to calculate the cost of insurance (sigh of relief) The cost is only based on how much you drive, along with a low base rate.
“Our typical customers are Millennials that are likely to live in major urban areas and drive less than 10,000 miles/year. They frequently uses alternative transportation to commute and get around. They are tech-savvy and openly embrace the idea of optimizing their lives through technology.”
Metromile has raised $14 million in series A and B venture capital funding.
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